News Photo by Steve Schulwitz From left to right, Alpena firefighters Jeff King and Cain Makowski roll up fire hoses while at work on Tuesday. The fire department will purchase a new fire truck with a portion of the more than $4 million the city has in savings.

ALPENA — Over the years, Alpena has amassed more than $4 million in its savings, which is well above what policy dictates it should have.

Now, city staff and the Alpena Municipal Council intend to utilize a portion of that money on needed purchases and for projects in Alpena.

So far, the largest planned purchase will be a new fire truck for the Alpena Fire Department, and a second truck is slated to be purchased in the next several years.

According to Alpena Clerk Anna Soik, as of June 30 of last year, the city’s savings had ballooned to about $4.6 million, which equates to about 46% of budgeted expenses.

City policy dictates that 10% is the minimum and 20% the highest it is supposed to be, so a plan was hatched to use the money for city needs to get the fund balance more in line with policy, Soik said.

As a result of the spending, which will come directly from the general fund budget, the city is expected to show a large deficit at the end of this fiscal year on June 30 and for the 2024-25 budget.

Soik said the money in savings will make up the gap between revenues and expenses.

According to Soik, the money for the fire truck will show that the budget for this year sinks further in the red, by design. Plus, she said, as the budget year wraps up, she expects the deficit to shrink as last-minute adjustments are made.

Soik said Alpena has been able to bolster its savings by depositing its portion of the money the state sends to municipalities to make up for the loss of personal property tax. Soik said although the recent total in savings was well above the city policy, having it a little high isn’t bad in case there are unexpected costs the council wasn’t expecting.

“It’s not bad, but policy gives you the steps you need to take to reduce it and that is what we are doing now,” she said.

Soik said staff has been busy crafting the 2024-25 budget, which begins on July 1. She said the proposed budget will be introduced to the council on May 6 and then eventually will be adopted and put on public display.

She said she anticipates the new budget will be about $700,000 in the hole.

Municipalities are allowed to run a deficit budget as long as they have enough money in savings to cover the difference between revenues and expenses.